Eligibility criteria and credit calculation
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Eligibility criteria and credit calculation
Eligibility criteria
How the credit is calculated and paid to you
HCSB is business income
What you cannot do, while waiting to receive a credit
Eligibility criteria
You are eligible for the hiring credit for small business (HCSB) if, for each year, you meet all of the following conditions:
- You deducted employment insurance (EI) premiums from the remuneration you paid to your employees, or you paid the worker's share of EI premiums for barbers, hairdressers, fishers, or drivers of taxis or other passenger-carrying vehicles, and you remitted these premiums (along with your share of EI premiums) to your payroll program (RP) account.
- You reported the income and deductions on a T4 slip and filed this information on your RP account. For the reporting tax year, see the note and the table below.
- The total of employer EI premiums you paid was equal to, or less than, the threshold shown in the table below.
- Your total employer EI premiums increased in the second reporting tax year.
Note
If you opened, closed, or restructured your business during the second reporting year, your total employer EI premiums for the first reporting tax year may be zero. For more information, see Changes in your business that can affect the HCSB.
| HCSB year | First T4 reporting tax year | Second T4 reporting tax year | Threshold |
|---|---|---|---|
| 2013 | 2012 | 2013 | $15,000 |
How the credit is calculated and paid to you
There is no application form to complete.
If you are eligible, the CRA will automatically calculate the amount of your credit using the EI information from the T4 slips you filed in your first and second reporting tax year. The amount of the credit is the difference between the employer parts of the EI premiums you paid for the two years. The amount to be credited to your payroll program (RP) account will be greater than $2, but no more than $1,000.
Example
If your part of EI premiums paid in the first year was $2,300, and in the second year you hired new employees and paid employer EI premiums of $3,000, you would be eligible for a credit of $700.
If you have more than one RP account under your business number (BN), the CRA will determine if you are eligible to receive a credit by adding the employer EI premiums for all RP accounts under that BN. The amount of credit that each RP account will receive is generally proportional to the amount of the employer's EI premiums that was paid into each RP account.
After we have calculated your credit, we will apply it to any outstanding balance on your RP account, and then transfer the remaining credit to the current year. Your statement of account will tell you how we applied the credit. You can either apply this amount to your next remittance or get a refund for the amount. An option is to have it deposited directly into your bank account. For information on how to ask for direct deposit, see Direct deposit.
To get your credit refunded to you, you can make an online request using My Business Account.
HCSB is business income
If you receive the HCSB, you have to claim that amount as income or reduce your EI expense claim when you file your corporation income tax return, even if we transferred some or all of this credit to pay off a debt.
What you cannot do, while waiting to receive a credit
Even if you are eligible for the HCSB, you cannot reduce your payroll remittances by the amount of the credit that you think you will receive, unless we tell you that you can do this.
Related topics
- Date modified:
- 2016-01-05